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The United Steelworkers and
American steel
Corp.
X -2.27%
reached an agreement in principle for a new employment contract covering at least 14,000 workers, thus breaking a three-year wage freeze.
The union and the company issued statements Monday afternoon confirming the initial agreement, but representatives of both parties declined to comment on the terms of the contract.
Pittsburgh-based steel workers have been demanding increases under a new 25% tariff on steel imports enforced by the Trump administration. These duties helped the United States Steel to raise their prices, along with the expansion of the US economy.
The new deal would last four years, according to the company, and would likely increase compensation, including wages, for employees. In the United States, on a trade website, US Steel has touted basic wage increases over a six-year period. The union, however, fought a contract of this duration.
In this scenario, an employee in the lowest salary group in the company would earn $ 20.45 an hour, but the same job would earn $ 24.66 an hour by September 2023, an increase of about 21%. The union said the proposed increases would be largely offset by the costs of the company's proposed health insurance coverage.
US Steel believes this preliminary agreement is "fair and in the best long-term interest of our employees and their families, as well as US Steel's customers, shareholders and other stakeholders," said David Burritt, General Manager of society.
Shares in US Steel fell 2.3% to $ 27.97 on Monday, but rose 0.5% after sitting hours.
The unionized workers in the company had previously allowed union leaders to call for a strike if negotiations failed. The previous agreement expired on September 1, but employees continued to work as negotiators for both parties and worked on an agreement.
"This group of workers resisted a highly profitable venture and claimed some of the success they helped create," said Tom Conway, chairman of the union's bargaining committee, in his prepared remarks.
About 14,000 US Steel workers would be covered by the contract at facilities across the country, the company said in its statement. The union however indicated that the proposed agreement would cover 16,000 members. Neither party could explain the discrepancy immediately.
With the agreement in principle in place, the workers will now review the proposal and then vote on it. A spokesman for the union said the organization's negotiating committee had recommended its members to ratify the deal.
In the latest collective agreement between US Steel and its unionized employees, employees agreed to a wage freeze, with the company losing money.
The industry is healthier now. In August, US Steel announced that net sales for the second quarter had increased by approximately $ 3.6 billion, an increase of 15% over the previous year, while profits had dropped by 18% to $ 214 million.
ArcelorMittal
HER
The management and employees represented by the United Steelworkers are also negotiating a new contract.
ArcelorMittal and US Steel represent 40% of the US flat rolled steel production capacity used throughout the industrial sector.
Bob Tita contributed to this article.
Write to Micah Maidenberg at [email protected]
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